The Customs Department is gearing up to enforce value-added tax (VAT) on all goods imported via postal services starting in May, irrespective of their value, as confirmed by Finance permanent secretary Lavaron Sangsnit.
Presently, imported goods dispatched through postal channels dodge import duties and VAT if their declared value remains below 1,500 baht each, including cost, insurance, and freight (CIF).
However, the proliferation of low-cost goods flooding in from China has unsettled the market dynamics, providing these imports an advantageous edge over domestically taxed products.
In an effort to level the playing field, the Finance Ministry aims to subject all postal imports to VAT regardless of their CIF value, while import duties will continue to be waived.
Mr. Lavaron indicated that the Customs Department would formally announce this new VAT directive, which could be swiftly implemented compared to amendments to the Revenue Code.
A confidential insider from the Finance Ministry noted that the exemption threshold would exclude prohibited items, with each country setting its own thresholds based on economic factors.
Initially set at 1,000 baht, Thailand raised its threshold to 1,500 baht per item in 2018.
Thailand handles over 30 million imported parcels annually, with the majority falling below the 1,500 baht CIF threshold.
E-commerce platforms prominently feature a plethora of low-priced Chinese goods, often arriving in bulk shipments comprising thousands of items.
Addressing this challenge, particularly in terms of tax collection, could be arduous if officials must inspect each container, as suggested by the Finance Ministry.
Customs authorities are actively exploring efficient tax collection methods for these budget imports.
